Is the CLARITY Act a surveillance bill in disguise?

Galaxy Digital research head Alex Thorn warns that the U.S. Digital Asset Market CLARITY Act — while offering regulatory clarity — could amount to a major expansion of financial surveillance and pose downside risks for crypto markets. Thorn highlights OFAC data showing 518 sanctioned Bitcoin addresses that together net ~9,306 BTC (~$707M), arguing the bill would broaden Treasury powers to intercept illicit assets. Critics (including Cardano founder Charles Hoskinson) say broad provisions could be weaponized by future administrations and automatically classify new tokens as securities, stifling competition and DeFi. Industry lobbying (notably JPMorgan) is pushing to prevent tokenized securities or stablecoin yields from undermining traditional bank deposits; a likely compromise would ban passive “idle yield” on stablecoins. Market impact: greater regulatory control and reduced yield opportunities could pressure crypto risk appetite and slow institutional integration, while delays or failure to pass the bill by end-April 2026 would lower near-term legislative odds.